Affordability constraints were pushing more tenants to apartment living,and more affordable areas,Powell said,while demand had eased in lifestyle locations that had seen extreme growth.
Units in the Parramatta region and the city and inner south,harder hit by border closures,recorded the largest increases,up more than 8 per cent each over the quarter.
Meanwhile,house rents fell on the northern beaches (-3.8 per cent),and north shore (-1.4 per cent). Rents in all regions were up year-on-year.
AMP Capital chief economist Dr Shane Oliver said the collapse in rental vacancies was pushing up rents.
“It’s probably going to take some time before it gets better because the supply of property will take time to catch up,” he said.
Rental demand could ease as more tenants look to shared accommodation or stay with family as economic conditions deteriorate,Oliver said,but this could be offset by rebounding immigration levels. Ultimately,rents would hit an affordability ceiling.
Bellevue Hill tenant Maggie Sewell stayed put when the rent on her three-bedroom unit rose by $50 to $900 per week earlier this year,and sought two new housemates to replace those moving out.
“I’d heard it was really mad out there … so it didn’t seem worth it,when I may have ended up having to move to somewhere more expensive,” the 23-year-old student said.
“When we[advertised a room] on Facebook we had so many requests ... I think it’s still pretty dire out there,and I think it’s getting stupidly expensive.”
Sewell’s friends in neighbouring suburbs were paying much more. She hoped further rent rises would be limited,but knew the eastern suburbs would always be more expensive than other regions.
Tenants’ Union of NSW chief executive Leo Patterson Ross said renters were struggling to afford increasing rents and energy costs. Some were staying in poor quality homes,while others were pushed into homelessness and the level of renter distress was much higher than in the past.
“[More] people are calling about things like “no grounds’ evictions and rent increases,” he said. “We’re getting calls ... from people facing a 20 or 30 per cent rent increase.”
Loading
Patterson Ross said a lack of affordable,well-located homes was the fundamental issue,and called for all political parties to head to next year’s state election with solutions.
Ray White’s chief executive of property management Emily Sim said some heat had come out of the rental market in recent weeks and fewer tenants were making offers above advertised rates.
Sim said rising rents,energy costs and an uncertain economic outlook were affecting what tenants were prepared to pay. Share houses were coming back with a vengeance,but even a single room could cost $300 to $400.
“If we’re not an affordable tipping point now,I think people are at least starting to get concerned that they’re getting too close to the sun,” she said.